Treasuries were slightly stronger in the overnight session with 10yr yields falling just over a bp. They've moved another 2-3bps lower as the morning progressed with most of the movement seen between data releases (as opposed to the few minutes immediately following them--a clearer sign of causality).
That's not to say that the data hasn't helped bond market positivity. With both the Empire State Manufacturing data and the NAHB Housing Market Index in weaker shape, there's certainly an argument to be made for that. It's just that bond markets lost ground with the former--sort of a paradox unless you focus specifically on the resilient Employment component of the data.
Causality is a hard case to make with the NAHB data as well, considering that equities markets moved into stronger territory following the release. If weaker data was fueling bond market positivity, we'd expect it to detract from equities, in general.
Beyond the data, there are two notable takeaways from this morning. First, the February trend toward higher Treasury yields is definitely waning. What had been a straight line pointing gently higher is now looking like a more curved "leveling-off." Things don't look as great for MBS, which have been underperforming so far today (and last week as well). Fannie 4.0s are only up 4 ticks vs 10yr Treasury prices up 12 ticks.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
96-21 : +0-09
100-28 : +0-07
104-10 : +0-05
| Treasuries || |
0.2985 : -0.0205
2.6997 : -0.0453
3.6655 : -0.0345
| Pricing as of 2/18/14 12:01PMEST |
Morning Reprice Alerts and Updates
10:33AM : Weather Made for Rapidly Cooling Builder Sentiment; Bonds Don't Really Care
9:14AM : Bond Markets Trying to Hold Moderate Overnight Improvement
Live Chat Featured Comments
Tim McNerney : "This may have been asked before...can a 1st time home buyer utilize 401k for down payment and closing costs with no added tax implications or no tax penalties?"
joon choi : "borrower should check with their tax accountant"
Matthew Graham : "RTRS- U.S. FEB NAHB HOUSING MARKET INDEX 46 VERSUS 56 IN JAN"
Matthew Graham : "RTRS- NAHB FEB INDEX OF CURRENT SINGLE-FAMILY HOME SALES 51 VERSUS 62 IN JAN"
Matthew Graham : "RTRS - NAHB FEB INDEX OF PROSPECTIVE BUYERS 31 VERSUS 40 IN JAN"
Matthew Graham : "RTRS - WEATHER CONDITIONS ACROSS MOST OF THE COUNTRY LED TO A DECLINE IN BUYER TRAFFIC LAST MONTH - NAHB"
Andy Pada, Jr. : "they are also saying that supply for land is low"
Sung Kim : "supply chain issues as well... nothing to do with base price increases and rates"
Andrew Horowitz : "can they even pour foundations with sub freezing temps at night in 60% of the country?"
Hugh W. Page : "If it's truly weather related perhaps that means we have a lot of "pent up demand" for the spring buying season?"
Gaius Rossini : "the fundamental story driving the rise over the past couple years has been low construction against increasing housing demand. builders it was said had the prospects of increasing production into higher prices."
Gaius Rossini : "either that was wrong, this data point (or the whole series) is inaccurate, or something has changed."